2024 abolishes base salary, on what basis is pension calculated?

According to current regulations, employees who have participated in social insurance for 20 years or more and have reached the prescribed retirement age are entitled to a monthly pension.

In the draft Law on Social Insurance (amended), it is expected that Expected to pass in 2024, the drafting agency proposes to reduce the number of years participating in social insurance to receive pension from 20 years to 15 years.

According to this proposal, when reaching retirement age, male workers Paying social insurance for 15 to less than 20 years will receive a pension based on the number of years of payment. Each year of payment is calculated as 225% of the average monthly salary calculated for social insurance payment.

That is, if a male employee has 15 years of participation The social insurance pension they receive is equivalent to 3375% of the average monthly income paid for social insurance.

After that, each year of social insurance payment, male workers are added 225% until they reach 45% when paying. Social insurance for 21 years. From the 21st year of payment onwards, each year the employee participates in social insurance, 2% will be added to the pension.

For female employees, the monthly pension is equal to 45% of salary. Average monthly social insurance payment after participating for 15 years. After that, each year of social insurance payment, 2% will be added to the pension.

However, if the Social Insurance Law (amended) is passed in 2024 as planned, it will not take effect until July 1, 2025. Therefore, in 2024, how to calculate pensions? still applied according to the 2014 Law on Social Insurance.

That is, the lowest monthly pension is equal to 45% of the average monthly income paid for social insurance when female employees pay 15 years of social insurance and male employees pay 20 years. Social insurance year. Then, each year social insurance payment is added to the pension, the maximum pension rate is 75% of the average monthly income paid for social insurance.

So if you retire in 2024, you will have the same amount of pension. If the number of years of social insurance payment is 20 years, male employees will receive a monthly pension equal to 45% of the average monthly salary paid for social insurance; female employees will receive a monthly pension equal to 55% of the average salary monthly income paid for social insurance.

For those whose time of social insurance payment is higher than the number of years corresponding to the maximum pension rate (75%), in addition to the pension, they will also receive a one-time allowance when Retirement. The calculation of one-time benefits upon retirement is as follows.

To ensure fairness for employees participating in social insurance, the average monthly salary for social insurance payment is not fixed but is adjusted according to the consumer price index issued by the state every year. year.

The Ministry of Labor, War Invalids and Social Affairs has drafted a Circular regulating the adjustment of salaries and monthly income paid for social insurance in 2024. It is expected that when issued, this circular will effective from February 28, the adjusted regulations will be applied from January 1.

Monthly salary and monthly income paid for social insurance after adjustment according to the draft circular above will be used as The basis for calculating pensions for employees retiring in 2024.

In addition, for employees participating in compulsory social insurance, the 2014 Social Insurance Law stipulates that the minimum pension level is equal to the base salary. The base salary applied in 2024 is 18 million VND. Therefore, the minimum pension that retirees will receive in 2024 is 18 million VND.

It is expected that from July 1, the Government will implement it. Current salary reform abolishes the base salary. At that time, the Government will have specific instructions to calculate the minimum pension level.

In Appendix IV attached to Resolution 01/NQ-CP in 2024, the Government assigned the Ministry of Labor, War Invalids and Social Affairs Association completes decree adjusting pensionsbenefits social insurance monthly allowance in May this year.